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What should a viticultural area name on a wine label tell us? Should it be a type of shorthand for where the grapes were grown, for where the wine was made, or both? Should it tell us even more, as European appellations of origin do (or at least purport to do)? A proposed amendment to the requirements for use of viticultural area names on labels and in advertising would make vineyard location the focus of designations of origin.

Current regulations allow the use of approved American viticultural area (AVA) names as appellations of origin on wine labels when (1) at least 85 percent of the wine is made from grapes grown in the AVA and (2) the wine has been fully finished within the State, or one of the States, within which the AVA is located. [27 C.F.R. §4.25.] Last month the Alcohol and Tobacco Tax and Trade Bureau (TTB) proposed an amendment to the regulations to allow the use of an AVA name as an appellation for wines that meet the first criterion but have been fully finished in a State adjacent to the State in which the designated AVA is located. Under the proposed amendment, a wine made from grapes grown in New York’s Finger Lakes viticultural area but finished in Newark, New Jersey, could still be designated by the Finger Lakes appellation of origin. In other words, the designation of origin would indicate with specificity where the grapes were grown—the Finger Lakes—while giving a general idea of where the wine was produced—New York, Vermont, Connecticut, New Jersey, or Pennsylvania.

History of the Proposed Rule

The proposed amendment arose in the context of a petition to establish a new AVA in Oregon. The new AVA, The Rocks District of Milton-Freewater (“The Rocks”), is situated entirely in Oregon just five miles from the Oregon-Washington border. The Rocks is also located within the Walla Walla Valley and Columbia Valley AVAs, both of which straddle the state line, as well as the larger Oregon AVA. Comments on the proposed establishment described a common practice among local vintners of using grapes from the Rocks District but making their wine less than ten miles beyond the border, where the nearest custom crush facilities are located. Commenters pointed out that under the current regulations, they would not be able to use the proposed AVA as a designation of origin because the wine was not finished there, while vintners who used Oregon facilities some 200 miles away would.

Implications and Alternatives

The answer to the tough question of whether the regulation should be changed depends on what TTB views as the primary function of a designation of origin. It is clear from the proposed rule that the agency is focused primarily on the origin of the grapes but still intends for AVAs to provide consumers with at least some information about where a wine was finished. In this case, the agency proposes a tolerance (see what I did there?) of n, where n is the number of states that are adjacent to the AVA in which the source vineyard lies. This means that wine produced in Hawaii from California-grown grapes still would not be eligible for a California designation of origin—let’s not go crazy—but wine produced in Oregon from California-grown grapes would.

It is unclear how TTB settled on the “adjacent state” standard and whether it considered alternatives, such as distance from the AVA (harder administratively) or complete disregard for where finishing takes place. In addition, while some winemakers from The Rocks pointed out that the amendment would increase competition for them by increasing the number of vintners who could use their designation of origin, it is unclear what the broader economic impact of the proposed amendment would be. One thing is clear, though: the proposed amendment will draw a Nebuchadnezzar of comments.

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